Tax Morale and Optimal Taxation
Year: 2004
Type: preprint
Abstract: We study experimentally how taxpayers choose between two tax regimes to fund a public\ngood. The first-best tax regime imposes a general, distortion-free income tax. However, this\ntax cannot be enforced. The second-best alternative supplements the income tax by a specific\ncommodity tax. This tax cannot be evaded but distorts optimal consumption choices, instead.\nThe result is that a large majority of subjects prefer the general income tax regime. The bulk\nof votes is consistent with actual payoffs. We isolate tax morale as cause for payoffs above\ntheoretical predictions.
Source: SSRN Electronic Journal
Authors: Werner Gueth, Rupert Sausgruber
Institution: Vienna University of Economics and Business
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1513516236